Page 30 - The Latest Homebuying Guide

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Step 1 – Put your financial house in order
Lenders are mandated by law to ensure that you satisfy the “Four
C’s of underwriting.” These are:

1. Credit history. This shows your demonstrated responsibility
to manage debt

2. Capacity to repay. Regular income and employment

3. Cash assets. Needed to cover downpayment and closing
cost

4. Collateral. Value of the home you wish to buy.

The first three C’s are totally within your control and that is where
you should start.

Credit History
Credit is your ability to get goods and services now, and pay for
them later. Credit is a powerful financial instrument, and if
managed properly, it can give you a really good financial standing
in life. It can also save you a lot of money in interest, especially on
a mortgage. Used carelessly however, credit can be a nightmare.
It can suck the breath out of your financial standing and cost you
thousands of dollars with higher interest rates.

Ranking your credit

Score Rank
800 – 850 Exceptional
740 – 799 Very good
670 – 739 Good
580 – 669 Fair
579 – below Poor

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